The Uganda shilling traded sideways versus its American counterpart on Tuesday ending the day marginally stronger.
Demand and supply factors remained the key drivers for the USD-UGX pair in yesterday’s session as fundamental developments took a backseat, resulting to subdued trading action for the pair.
Looking ahead, range bound trading looks set to continue in the near term with a bullish ting towards the local unit.
US Dollar rises towards three-week high
The U.S. dollar rose towards a three-week high on Tuesday as dampened hope that the Federal Reserve will ease monetary policy aggressively, while worry over U.S.- China trade tensions hitting corporate profits contributed to an equity sell-off on Wall Street.
Fed Chairman Jerome Powell is due to appear before Congress today and tomorrow for his semi-annual testimony, and is likely to be questioned about his willingness to ease policy.
The Euro was lower on Tuesday, confirming a three-day losing streak. Recent loses could be attributed to better than expected US data, as well as dismal German factory activity data released this week.
Meanwhile GBP/USD hit a six-month low before rebounding slightly to trade at 1.2470 levels, after U.K. retail sales fell 1.6% from a year earlier in June, adding to indications that the British economy is contracting.
The looming risk of a Hard Brexit, meanwhile, remains a background threat to the sterling, given that the two men vying to be Prime Minister have both indicated their willingness to risk that scenario.
